Stephen Bright, the society's finance director, described Sumitomo's portfolio of 1,600 mortgages as 'top quality'. He said Sumitomo had suffered only five or six repossessions and its average loan-to-value ratio was only 58 per cent.
Mark Collins, assistant general manager at the Japanese bank, said the mortgage portfolio had been reasonably profitable but Sumitomo saw little potential for growth in the mortgage market over the next few years. Sumitomo, which has had a branch in London since 1918, will now concentrate on its main business of lending to UK companies.
This latest purchase follows Birmingham Midshires' acquisition of the mortgage books of Target, the life insurer owned by TSB, and FS Assurance, the small Scottish life office acquired by Britannia Building Society. Mr Bright said his society, the 13th biggest, was interested in acquiring further quality assets.
Numerous companies that entered the mortgage market as centralised lenders in the mid- 1980s have put their now-dormant businesses up for sale, but many suffer from significant arrears and repossession problems.